Key Financial and Career Concepts

Vocabulary flashcards covering fundamental terms in personal finance, career planning, real estate, and retirement investing.

Return on Investment (ROI)

The profit or loss you earn compared to what you originally put in.

Opportunity Cost

What you give up when you choose one option over another, such as wages you do not earn while in school.

Interest Profiler

A career assessment, like the one on My Next Move, that matches your interests to six work characteristics and suggests careers that fit.

Informational Interview

A short, informal conversation with someone who works in a field you are curious about, to learn what the job is really like.

Gross Pay

Your total salary before taxes and deductions.

Net Pay

Your take-home pay after taxes and deductions. This is the money you actually budget with.

50/30/20 Rule

A budget guideline: 50% of net pay to needs, 30% to wants, 20% to savings and investments.

Credit Score

A number from 300 to 850 that tells lenders how responsible you are with borrowed money.

Credit Utilization Ratio

The percentage of your available credit you are using. Keep the balance you carry below 30% of your limit.

Interest Rate

The price a lender charges you to borrow money, shown as a yearly percentage. (cost of borrowing money that can increase over time)

Principal

The amount of money you borrowed, not counting interest.

Amortization

the process of paying off a loan over time through regular payments that cover both interest and the money you borrowed.

Equity

The part of a property that you actually own after subtracting what you owe

House Hacking

Buying a 2 to 4 unit property, living in one unit, and renting the others to cover the mortgage.

FHA Loan

A government-backed home loan that lets people buy a house by paying as little as 3.5% of the price upfront.

Appreciation

The increase in a property’s value over time.

Gentrification

New investment and wealthier residents moving into a historically lower-income neighborhood.

Cash Flow

Monthly income from a property minus its monthly expenses.

Capital Expenditures (CapEx)

Money set aside for large future replacements, such as a roof or furnace.

Depreciation

The decrease in an asset's value over time due to age, wear, or use, spread over 27.5 years.

Cash-Out Refinance

Getting cash by taking out a new, bigger home loan and replacing your old one.

Loan-to-Value (LTV)

How much you borrow compared to your home's value. Banks usually let you borrow up to 80% of what your home is worth when refinancing.

Soft Skills

People skills such as communicating, listening, persuading, collaborating, and leading. Hard skills are technical abilities like building a spreadsheet.

Compounding Growth

When money earns interest, and that interest also starts earning interest, causing money to grow faster over time.

Roth IRA

A retirement savings account where you put in money after taxes, and your earnings are tax-free when you take the money out in retirement.

401(k)

A retirement savings account through your job where money is taken from your paycheck before taxes, and you pay taxes when you take it out.

Employer Match

Free money your employer adds to your 401(k) when you contribute, such as matching up to 5% of salary.